Palladium(0)-catalyzed reaction of allene-substituted allylic carboxylates 3-8 employing 2-5 mol % of Pd(dba)(2) in refluxing toluene leads to the carbocyclization and elimination of carboxylic acid to give bicyclo[4.3.0]nonadiene and bicyclo[5.3.0]decadiene derivatives (12-17). The carbon-carbon bond formation is stereospecific, occurring syn with respect to the leaving group. Addition of maleic anhydride as a ligand to the above-mentioned procedures changed the outcome of the reaction, and under these conditions 3-5 afforded cycloisomerized products 21-23. The experimental results are consistent with a mechanism involving oxidative addition of the allylic carboxylate to Pd(0) to give an electron-deficient (pi-allyl)palladium intermediate, followed by nucleophilic attack by the allene on the face of the pi-allyl opposite to that of the palladium atom. Furthermore, it was found that the Pd(dba)(2)-catalyzed cyclization of the trans-cycloheptene derivative (trans-8) can be directed to give either the trans-fused (trans-17) or the cis-fused (cis-17) ring system by altering the solvent. The former reaction proceeds via a nucleophilic trans-allene attack on the (pi-allyl)palladium intermediate, whereas the latter involves a syn-allene insertion into the allyl-Pd bond of the same intermediate. The products from the carbocylization undergo stereoselective Diels-Alder reactions to give stereodefined polycyclic systems in high yields.